FCC looking into Internet peering complaints from Netflix, consumers

The U.S. Federal Communications Commission is looking into complaints from Netflix and some Internet backbone providers that several large broadband providers have been refusing for years to upgrade their backbone connections as a way to slow video traffic that competes with their own services.

Following a public spat this week between Netflix and Verizon Communications, FCC Chairman Tom Wheeler said the agency is collecting information about the so-called peering and transit arrangements that allow Web traffic to flow between networks and content providers.

Wheeler stopped short of calling the FCC review a formal investigation, but he said there is growing public concern about problems with peering arrangements. In recent months, Netflix, along with backbone providers Level 3 and Cogent, have accused large U.S. broadband providers, particularly ones that offer cable-like video services, of refusing to make inexpensive upgrades to their networks in order to accommodate growing video traffic from Web-based competitors.

The FCC staff is collecting information about peering arrangements and about recent traffic management agreements Netflix has signed with Comcast and Verizon, Wheeler said. Netflix officials have complained about those agreements, saying they shouldn't have to sign side deals with broadband providers to deliver videos broadband customers ask for.

"Consumers must get what they pay for," Wheeler said in a statement. "As the consumer's representative we need to know what is going on. I have therefore directed the commission staff to obtain the information we need to understand precisely what is happening in order to understand whether consumers are being harmed."

So far, the FCC is collecting information and "not regulating," Wheeler added. "We are looking under the hood. Consumers want transparency. They want answers. And so do I."

The bandwidth-intensive Netflix has caused some of its own problems by using low-cost backbone providers, Jim Cicconi, AT&T's senior executive vice president for external and legislative affairs, suggested during a net neutrality debate this week. Netflix is trying to get broadband providers to deliver its traffic at "zero cost," he said.

Dan Rayburn, executive vice president with news and analysis site StreamingMedia.com, raised similar points in a blog post this week. In cases where Netflix could not get free peering arrangements, the company has moved its traffic "onto very specific Internet paths that were not capable of handling their massive load and caused the congestion that impacted customers," he wrote. "If Netflix does not receive free peering, ISP customers do not receive good performance and get low rankings and shame from Netflix."

A person named George recently filed comments to the FCC in the agency's net neutrality proceeding, Wheeler said. "Is Verizon abusing Net Neutrality and causing Netflix picture quality to be degraded by 'throttling' transmission speeds?" George wrote to the agency. "Who is at fault here? The consumer is the one suffering! What can you do?"

The FCC is not suggesting that any one company is at fault, Wheeler said. "But George has gone to the heart of the matter: What is going on and what can the FCC do on behalf of consumers?" he added. "Consumers pay their ISP and they pay content providers like Hulu, Netflix or Amazon. Then when they don't get good service they wonder what is going on."

Netflix applauded Wheeler's request for more information. "We welcome the FCC's efforts to bring more transparency in this area," spokesman Joris Evers said by email. "Americans deserve to get the speed and quality of Internet access they pay for."

Verizon urged the FCC to refrain from regulating the peering arrangements. "Internet traffic exchange has always been handled through commercial agreements," spokesman Ed McFadden said by email. "This has worked well for the Internet ecosystem and consumers. We are hopeful that policy makers will recognize this fact and that the Internet will continue to be the engine of growth of the global economy."

Comcast welcomes the FCC's attention on peering arrangements, the company said in a statement.

"Internet traffic exchange on the backbone is part of ensuring that bits flow freely and efficiently and all actors across the system have a shared responsibility to preserve the smooth functioning and highly competitive backbone interconnection market," the company said. "We welcome this review, which will allow the commission full transparency into the entire Internet backbone ecosystem and enable full education as to how this market works."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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